Arizona Department of Health Services Overwhelmed by Number of Dispensary Applications

Arizona recently held their application period for medical marijuana collectives in the state. Applications were accepted from May 14th to May 25th, and during that time frame the Department of Health Services received almost 500 applications.

The state can only approve 126 business licenses for collectives, one per Community Health Analysis Area (CHAA). CHAA’s were established in 2005 for purposes other than medical marijuana, but they are now being used to regulate where dispensaries can be located and how far apart they must be. (Image of how CHAA’s are divided, right).

Applications have only been filed in 99 of the 126 CHAA’s, but final locations will be determined in a lottery system for approved collectives. The lottery system will be held similarly to the televised state lottery broadcasts, with numbered balls in an air-powered tube. The lottery will be broadcast live via the internet for computer users to be able to watch the drawing in real time.

After the “winning” collectives are chosen, the owners will be required to get their business permit from the state. They will also have to get approval from the city and county in which they will be located. The final step before opening will be to have a state inspector come through the facility. After they get the inspector’s approval, they can get their state operating license and open their doors.

Should one of the approved collectives not begin operations for any reason, the CHAA that they are located in will have no open collective until the next year’s permitting process starts.

Along with their four page application, prospective collectives were also required to submit a partially-refundable deposit of $5,000. If their collective is not chosen to open, they will be refunded $1,000. DHS director Will Humble said that most applicants submitted their fee in the form of a cashier’s check, but one applicant paid it in cash.

There are 385 collectives that will not be allowed to open, strictly due to the CHAA limitations. The state of Arizona will make a profit of over $1.5 million off of denied applications alone. They will make an additional $500,000 plus off of the collectives whose applications they do accept. On top of that, the state has made another $1.5 million off of registrations by caregivers and patients. Suffice it to say, the state’s funds are quite full at the moment.

Money from the state’s medical marijuana program will go toward the regulation and inspection of the dispensaries and program in the state. In addition, part of the money will go to paying people who currently volunteer in order to run the state’s medical marijuana program. After those costs are managed, money will go to medical marijuana awareness and research.

It is anticipated that the DHS will grant permits starting in the first week of August.

Once collectives begin to open, some patients will be required to change how they access their medicine, whether they want to or not. Patients with a collective within 25 miles of their home will no longer be permitted to grow their own medicine at home. However, the limitation goes into place when the patient’s card expires, rather than when the collective opens, so many patients are taking preliminary precautions and renewing their medical marijuana cards early.